Global Dairy Trade Results Update – 6/19/18
Executive Summary
Dairy product prices declined during the GDT event held Jun 19th. Highlights from the most recent auction include:
The GDT Price Index also remained lower on a YOY basis for the fourth consecutive event, finishing 4.3% below previous year price levels at the Jun 19th event. The GDT Price Index remained 27.0% above the three year average price for the second auction of June, however.
Within the latest auction, declines in prices were led by cheddar cheese (-3.6%), followed by anhydrous milkfat (-2.5%), rennet casein (-2.2%), skim milk powder (-1.1%) and whole milk powder (-1.0%). The declines more than offset increases in butter (+0.8%) and lactose (+8.2%) prices. Butter milk powder and sweet whey powder were not offered at the Jun 19th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Jun 18th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Jun 19th event of 21,634 MT increased 0.3% from the previous event, finishing at a nine auction high. Total quantities sold increased on a YOY basis for the first time in the past nine months, finishing up 2.2%.
Volumes sold for all products within the June auctions increased 14.7% from average May volumes sold while finishing 0.1% above last year’s average volumes sold for the month of June. Volume sold for all products within the June auctions remained 8.7% below the previous three year average June quantities sold, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jun 19th event as GDT butter prices rebounded slightly from the previous event. U.S. spot butter prices are currently trading at a 6.5% discount to GDT prices while CME futures prices traded at a 3.2% discount to GDT prices from Jul ’18 – Dec ’18. U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Jun 19th event, despite GDT cheddar cheese prices declining to a five auction low. U.S. spot cheddar cheese prices are currently trading at a 20.1% discount to GDT prices while CME futures prices traded at a 4.0% discount to GDT prices from Jul ’18 – Nov ’18. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’18) and Contract 6 (Dec ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Jun 19th event, despite GDT SMP prices declining to a three auction low. U.S. spot NFDM prices are currently trading at an 18.7% discount to GDT prices while CME futures prices traded at a 13.7% discount to GDT prices from Jul ’18 – Dec ’18.
- The GDT Price Index declined for the seventh time in the past nine auctions during the Jun 19th event, finishing down 1.2%.
- Declines in prices within the Jun 19th event were led by cheddar cheese, followed by anhydrous milkfat, rennet casein, skim milk powder and whole milk powder. Cheddar cheese prices declined to a five auction low while skim milk powder and whole milk powder prices declined to three and ten auction lows, respectively. Butter prices rebounded slightly from the previous auction at the Jun 19th event.
- Total quantities sold for all products at the Jun 19th event increased 0.3% from the previous event, finishing at a nine auction high. Total quantities sold within the June auctions finished 0.1% above last year’s average volumes sold for the month of June but remained 8.7% below the previous three year average June quantities sold.
The GDT Price Index also remained lower on a YOY basis for the fourth consecutive event, finishing 4.3% below previous year price levels at the Jun 19th event. The GDT Price Index remained 27.0% above the three year average price for the second auction of June, however.
Within the latest auction, declines in prices were led by cheddar cheese (-3.6%), followed by anhydrous milkfat (-2.5%), rennet casein (-2.2%), skim milk powder (-1.1%) and whole milk powder (-1.0%). The declines more than offset increases in butter (+0.8%) and lactose (+8.2%) prices. Butter milk powder and sweet whey powder were not offered at the Jun 19th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Jun 18th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Jun 19th event of 21,634 MT increased 0.3% from the previous event, finishing at a nine auction high. Total quantities sold increased on a YOY basis for the first time in the past nine months, finishing up 2.2%.
Volumes sold for all products within the June auctions increased 14.7% from average May volumes sold while finishing 0.1% above last year’s average volumes sold for the month of June. Volume sold for all products within the June auctions remained 8.7% below the previous three year average June quantities sold, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jun 19th event as GDT butter prices rebounded slightly from the previous event. U.S. spot butter prices are currently trading at a 6.5% discount to GDT prices while CME futures prices traded at a 3.2% discount to GDT prices from Jul ’18 – Dec ’18. U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Jun 19th event, despite GDT cheddar cheese prices declining to a five auction low. U.S. spot cheddar cheese prices are currently trading at a 20.1% discount to GDT prices while CME futures prices traded at a 4.0% discount to GDT prices from Jul ’18 – Nov ’18. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’18) and Contract 6 (Dec ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Jun 19th event, despite GDT SMP prices declining to a three auction low. U.S. spot NFDM prices are currently trading at an 18.7% discount to GDT prices while CME futures prices traded at a 13.7% discount to GDT prices from Jul ’18 – Dec ’18.